EPS' point of sale unit sells bill payment business.

Buypass Corp., the point of sale processing unit of Electronic Payment Services Inc., has sold Buypay, its automated bill payment business.

The move seems to go against the conventional wisdom that consumers are warming to various forms of automated bill payments.

However, Buypass officials explained that the sale agreement with Travelers Express Co. will give Buypay more opportunity to grow, while freeing Buypass to concentrate on its core competencies of terminal driving and transaction data capture.

A provision of the sale, which takes effect Jan. 1, ensures that Buypass retains the exclusive right to process the electronic financial transactions generated by Buypay.

Buypay, which was founded in 1992 as a unit of CoreStates Financial Corp., provides its service at locations for utility customers who want to pay bills in person rather than by mail.

The service began in the Philadelphia area. With Bell Atlantic as its "anchor" client, Buy-pay rapidly attracted other utilities interested in ridding themselves of the task of accepting and processing payments made in person.

"We began to realize that the demand for this business is really nationwide," said Michael L. Douglas, chief executive of Atlanta-based Buypass.

"We began to be called by people in other markets even before we began to solicit" in those places.

"Establishing an agent network in each of the territories where we were getting calls ... wasn't something we wanted to be doing long term."

Buypay currently has about 2,000 agents in Pennsylvania, New Jersey, and Delaware. These handle about 20 million transactions per year.

The number of agents accepting payments should grow rapidly in the coming months, Mr. Douglas said.

Travelers Express, which claims to be the largest money order company in the United States, has about 40,000 locations nationwide, and many of these may soon begin to accept Buypay transactions.

Though details of Travelers Express' plans for Buypay were not immediately available, the company's president, Robert H. Bohanon, indicated in a statement that the purchase is part of an effort to leverage its investment in the agent network.

"The addition of a utility-bill payment service to our business portfolio is a strategic initiative and represents an excellent growth opportunity for our company," he said.

Mr. Douglas said he is confident that the number of transactions generated by Buypay will grow after Travelers Express takes over.

While acknowledging the rising popularity of home-based bill payment, he said telephone and personal-computer banking systems appeal to a very specific segment of the banking market.

As such, in-person bill payments are likely to remain numerous for some time.

"The assumption on the part of most people is that everyone writes a check to pay utility bills; that's far from true," Mr. Douglas said.

"One of the things that people overlook is that there is a group of people in the population who either are or choose to be unbanked" he said.

These people will continue to pay utility bills in cash, and such transactions are usually handled in person.

With the sale, Buypass rids itself of the responsibility of marketing Buypay and supporting the agent offices but retains transaction-processing volume.

Under the terms of the agreement, Travelers Express will inherit all Buypay customer contracts.

Buypass will offer technical support for the point of sale terminals that transmit payment information from agent offices.

"Quite honestly, our strength is transaction processing," Mr. Douglas said.

"We felt [that by selling Buy-pay] Buypass could better respond to the demands of the market -- specifically the utility companies -- and Travelers Express would have more product they could push down a distribution channel."

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